The Continuing Rise of Lumber Commodity Markets

As expected the commodity markets are continuing to rise. The good news is that the rather than seeing continued double digit growth, the rates have slowed considerably in the panel markets for things like OSB and CDX. While we do not expect them to take any more drastic jumps in the short term, they will most likely hold this price as the supply demand curve finds a new balance point.

The heavy movers this week are framing lumber, cedar and primed fascia with some products moving up more than 17%. Again, based on our inventory position and the market, we will try and absorb some of the changes in hopes that we can ride out the bump. Some lines that are manufactured will likely hold their increases long term so we must adjust our pricing to match right away.

This week we have also taken additional steps to protect our customer base in the market. We have specifically addressed our purchasing habits for many of our lines to look for opportunity to make sure we can protect the price quotes we have submitted and to make sure we can be competitive in the future. While we still cannot honor quotes much more than a week out, we will continue to look at any opportunity in front of us.

I am happy to report that while the steel markets for rebar and fasteners moved up, we were able to lower our cost compared to the replacement market and consequently our retail selling price on rebar. We have also looked into the composite decking market and taken a stocking position in the TimberTech line that will allow us to sell at much lower retail pricing than we have in the past, typically about 10% less.

On the horizon, we have heard from many of our other suppliers about modest increases in very specific lines into late March and early April. These include some of our roofing products at Hartnagels and fasteners between both stores.

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